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Russia Says Britain Used a Fake Rock to Hide Spy Gear

MOSCOW, Jan. 23 - An espionage scandal redolent of the cold war unfolded Monday after Russia accused four British diplomats of spying and linked some of their activities to the financing of prominent private organizations, including the Eurasia Foundation and the Moscow Helsinki Group.

A grainy black-and-white video, broadcast on state television on Sunday night and shown repeatedly again on Monday, was said to show a British diplomat picking up a fake rock that was said to conceal a communications device used to download and transmit classified information through hand-held computers.

The rock, the size of a watermelon, and the device, said to be able to transmit and receive data at distances of more than 60 feet, were seized near Moscow, prompting a search across the city for similar devices, Sergei N. Ignatchenko, the chief spokesman for Russia's intelligence agency, the Federal Security Service, told Russian reporters, according to the Interfax news agency.

A second device was found, but "the British intelligence service managed to retrieve one of the gadgets," he said.

A Russian citizen accused of complicity has been arrested, but another spokesman for the Russian intelligence agency, Nikolai N. Zakharov, declined to say whether he had been formally charged. Mr. Zakharov would say only that the spy ring had been discovered and broken up at the beginning of winter.

The fate of the four diplomats -- identified as middle-rank secretaries in the British Embassy -- remained unclear. Mr. Ignatchenko said their possible expulsion would be determined "at the political level."

The scandal threatens to raise diplomatic tensions, even as Russia has assumed the presidency of the Group of 8 industrial nations, which includes Britain. Mr. Ignatchenko accused Britain of violating an agreement it made in 1994 to end espionage in Russia. "In fact," he said, "we have been deceived."

Prime Minister Tony Blair, answering questions at a news conference in London, declined to comment. "I'm afraid you are going to get the old stock in trade: 'We never comment on security matters,' except when we want to, obviously," Mr. Blair said.

The nature of the espionage was shrouded in secrecy, but the accusations of a link to private organizations came amid a politically charged campaign against charities and advocacy groups here, many of them financed by the United States and European countries to promote democracy, independent news media and other aspects of civil society.

This month President Vladimir V. Putin signed into law new legal restrictions on such groups, which critics have said can be used to put pressure on those critical of Russian policies. But the relation between the espionage charges and the organizations appears to be tangential.

Mr. Zakharov said in a telephone interview that one of the diplomats, identified as Marc Doe, a political secretary, had approved grants distributed by the British government to Russian and international organizations, even as he was involved in covert activities.

"He gave money to them," Mr. Zakharov said, referring to the organizations. "That is all documented."

A spokesman for the British Embassy in Moscow declined to comment on the affair but cited a statement by the Foreign Office that said, "We reject any allegations of any improper conduct in our dealings with Russian" private organizations. "All of our assistance is given openly and aims to support the development of a healthy civil society in Russia," the statement said.

One of the groups supported by Britain and cited by officials was the Eurasia Foundation, a nonprofit organization based in Washington that provides an array of grants across the former Soviet Union.

Irina V. Akishina, director of the Moscow office, said in a telephone interview that the organization had received a grant worth about $105,000 in 2004 to promote independent newspapers in provincial Russian cities.

Ms. Akishina expressed bewilderment at the accusations and said they reflected the government's growing hostility toward private organizations that operate independently of the Kremlin.

"We certainly do feel there is some danger," she said, referring to the new law on organizations like hers. "We do not understand at all why we were mentioned in this program. We are not involved in any illegal activities."

The Moscow Helsinki Group, also said to be linked to the case, is one of the country's most prominent human rights organizations and is often critical of the Kremlin.

Russia's intelligence chiefs have publicly warned about the threat of espionage from the West. The warnings have underscored a growing wariness in Russian intelligence and diplomatic circles about what is widely seen as foreign interference in domestic affairs, especially in the wake of American and European support for democratic movements in Ukraine, Georgia and other former Soviet republics.

"Reconnaissance is not only not waning," Nikolai P. Patrushev, the director of the Federal Security Service, said in an interview in the official newspaper Rossiskaya Gazeta in November. "It is strengthening."

He said that last year counterintelligence agents had exposed 20 agents working for foreign governments and 65 foreigners working for secret services. Earlier last year Mr. Patrushev singled out several organizations, including the Peace Corps and the British charity Merlin, as fronts for foreign espionage.

The fake rock identified in the latest scandal is said to have been used as a drop for secret information, but with a high-tech twist. The hidden communication device allowed a Russian agent to transmit information in bursts lasting no more than a second or two, Mr. Ignatchenko and other security officials said. The British operatives could then download the information with their own palm computers, the officials said.